711.56342/3–151

The Chargé in Canada ( Bliss ) to the Secretary of State

restricted air priority
No. 1126

Subject: Leases for Communications Sites

A copy of the Embassy’s despatch no. 1098 on the above subject1 has been shown to Mr. E. A. MacKay, Defence Liaison Division, Department of External Affairs, who indicated that it was a complete and accurate statement of the position of the Government of Canada in this matter as originally explained to the Embassy.

In an effort to expedite consideration of the United States request for use of these communications sites, I made a preliminary draft yesterday of a revised Note, which I have discussed with Mr. MacKay. We concluded that the United States approach might be made in two different ways in an effort to eliminate the politically dangerous references to the Leased Bases Agreement. One such approach could be made in general terms, leaving the tenure of a lease indefinite, for such time as the lands may be required for the maintenance and operations of the communications system. Another approach would link this proposal with the Goose Bay lease, which also includes facilities for global communications. After discussing the matter with Under Secretary Heeney the Department of External Affairs has indicated that it would prefer the second approach.

There are attached hereto copies of the proposed Note as now redrafted.2 Numbered paragraph five3 represents the text which would be acceptable to officials in the Department of External Affairs and in their view more acceptable to Cabinet Ministers and to Parliament than the original United States proposals. These, which were incorporated in the Embassy’s original Note, were set forth in the penultimate paragraph in the letter from the Secretary of Defense attached to the Department’s Instruction No. 1344 as supplemented by the third paragraph of the Department’s Instruction.

In sum, this redraft omits any reference to a lease, avoids linking the proposal to the 1941 Leased Bases Agreement, and puts use of these facilities on much the same basis as those to be made available at [Page 875] Goose Bay. The justifications provided are the defense of the North Atlantic Region and the heavy capital investment of the United States in these facilities.

In the consideration of this redrafted Note in Washington the Embassy suggests that the following questions must be weighed:

1.
Are there any political or practical reasons for desiring a lease of these communications facilities, as distinct from those at Goose Bay, for a period of eighty-nine years as against the Canadian suggestion of twenty years subject to renewal if the facilities continue to be required for purposes of mutual defense?
2.
Is it necessary to refer to the authority of Article XXVII of the 1941 Leased Bases Agreement, or is the United States satisfied to justify its request on the considerations set forth in numbered paragraph five?
3.
Is the application of the conditions of the 1941 Leased Bases Agreement to these areas a matter of significance? As indicated in the Embassy’s despatch no. 1098 the only relevant feature of these conditions would be the question of jurisdiction, the significance of which will have to be determined in Washington.
4.
The Secretary of Defense furnished an undertaking that the United States would reimburse the Canadian Government for any expenses which Canada might incur in connection with acquiring these properties. (Numbered paragraph seven of draft Note.) One such expense would be the cost of purchasing the lands and obtaining title in the name of the Federal Government. It is understood that when the Newfoundland Bases were acquired, the United States reimbursed the United Kingdom for its expenditures in acquiring the lands included in the Leased Base Areas. That, however, was in connection with a lease for ninety-nine years. The question arises, therefore, as to whether or not the United States would be willing to reimburse the Government of Canada for such expenditures when the lands involved are turned over to the United States for a much shorter period.

The Embassy expects in due course to receive appropriate instructions from the Department in connection with the points raised in this despatch.

Don C. Bliss
  1. Supra.
  2. Not printed.
  3. Paragraph five was as follows: “In view of the importance to the defense of the North Atlantic Region of the proposed communications facilities, and in view of the heavy capital investment which will be entailed in their construction, the Government of Canada is requested to make available the lands described above to the United States for its exclusive use for 20 years for the purpose of installing and operating these facilities. If the United States should make a request for extension at the end of the 20-year period, it is understood that such a request would be considered by the Canadian Government in consultation with the United States Government in the light of the common defense interests of the two countries.”
  4. Dated February 19, p. 870.